Gold Investing

[dubsie]

As a long term holder in gold, a significant amount, it would be unwise to assume that by buying gold today you will preserve wealth in any meaningful way.

Let me give you an example. 10 years ago gold was much the same value as it is today. 2 years ago gold was significantly higher than it is today, just previous to the Brexit vote it was significantly lower. Buying gold will mean you will immediately take around a 5% hit, that will be the spread between buying and selling. If gold remains the same price over the next year or so, very possible, you will be far better off putting your money in the bank.

I was fortunate in that I bought just before the Brexit vote that caused the price of gold to increase significantly due mainly to the fall in the pound against the dollar. This was pure luck on my part.

Unless you are just gambling on any meaningful rise in gold in the short term, and this will be a pure gamble, holding gold should only be regarded as a safe haven in case of a catastrophic collapse in the global financial systems. Otherwise it is like any other investment.

The idea that anyone can make money by buying gold abroad and importing it is, not to put to fine a point on it, absurd. If it was that easy do you really think that those with any money would not be importing it regularly and immediately selling, and then repeating?

Exactly, to make money buying and selling gold you have got to be trading in volume and looking at tiny market trends. Holding onto gold long term is simply a way of protecting wealth against inflation as it's seen as a safer bet then cash. But you could say the same thing about art and valuable artifacts.....another thing the wealthy will buy to hide and protect wealth.

There is no get out of jail card for people in this situation other than to cut back and hold your breath and hope things get better. My opinion is we are in a very bad place because our growth is the worst in the G7 which will mean lower than expected tax revenues partnered with the need to support a crumbling state infrastructure....I'm afraid tye government failed to fix the roof in the summer

 

[Baxi Boy]

Gold isn't a good investment and I say that In terms increasing your wealth.....gold is an investment to protect wealth against inflation.

Investments are risky and gold isn't risky but holds its value pretty reliably. So if you have savings which are currently devaluing at 11% it would be wise to buy gold coins instead. The problem is there are priced at around 600 pounds each

Traders who deal with gold look for volume and tiny fluctuations to make their money. For us that simply isn't practical.

Full sovereigns on eBay are selling for around £380-400,halves are £190-£200.

 

[Muzungu]

Full sovereigns on eBay are selling for around £380-400,halves are £190-£200.

It is worth taking into account that if you are buying and selling sovereigns through a dealer there will be a spread, roughly, of around 12%. So the gold price will have to increase by 12% before you break even. The advantage of buying sovereigns over bullion is that it is CGT free. But of course that only matters if you make a profit that puts you in that bracket.

I would not recommend buying privately as you will never know what you are getting.

The dealer I use.

 

[Baxi Boy]

Buy 24 carrot gold, secondhand jewellery - its a bit like cash as one of my friends has bracelets wears them and when gold price was high she got full market gold price minus just a few quid expenses from one of those shops that makes/sell asian style jewellery. Downside is I guess is keeping it safe in the house or getting mugged when you are out

Very few things are made of 24 carot gold.It’s often 9 or 18,Sovereigns are 22 carot.

 

[Baxi Boy]

It is worth taking into account that if you are buying and selling sovereigns through a dealer there will be a spread, roughly, of around 12%. So the gold price will have to increase by 12% before you break even. The advantage of buying sovereigns over bullion is that it is CGT free. But of course that only matters if you make a profit that puts you in that bracket.

I would not recommend buying privately as you will never know what you are getting.

The dealer I use.

I have bought several times on eBay,always had the genuine things,I often collect and check size and weight!

 

[dubsie]

I would not buy anything like that on eBay, these things are often counterfeit and weight proves nothing. You buy and sell this stuff via the official routes or risk losing all your money.

There are different coins with different purity and weight and sell at different prices. You can buy a half sovereign but the value of royal mint can also be influenced by how rare they are.

We have yet to experience the level of inflation required to buy gold. If this was Turkey then gold would be viable but inflation is still only 11%.....it's not hyper yet.

 

[Baxi Boy]

I would not buy anything like that on eBay, these things are often counterfeit and weight proves nothing. You buy and sell this stuff via the official routes or risk losing all your money.

There are different coins with different purity and weight and sell at different prices. You can buy a half sovereign but the value of royal mint can also be influenced by how rare they are.
Gold sovereigns have a specific weight and diameter/ thickness that no other metal can equal,so if not 7.98 grams and
We have yet to experience the level of inflation required to buy gold. If this was Turkey then gold would be viable but inflation is still only 11%.....it's not hyper yet.

 

[Baxi Boy]

Sovereigns are 7.98 grams and 22.05mm diameter,1.52mm thick,no other metal can equal this,so if all this is correct you have 22 carot gold.

 

[LsaissLai]

Investing in gold is one of the safest ways to invest since gold is the world currency, and there is no risk that gold will fall in value.

In addition, many countries have gold reserves, so they benefit from the fact that the value of gold has remained consistently high. You won't earn much by investing in gold, but you will get money stably. The first time I invested money in gold was on the recommendation of https://stephenswmg.com. I got 20% of my investment every year, which is a lot.

 

[Baxi Boy]

There are some gains if gold rises there’s no tax to pay on the gains unlike savings in banks. Also you can have gold investments and still claim means tests benefits such as pension credit,which you can’t if above the limits in savings.

 

[Muzungu]

There are some gains if gold rises there’s no tax to pay on the gains unlike savings in banks. Also you can have gold investments and still claim means tests benefits such as pension credit,which you can’t if above the limits in savings.

As a significant holder of gold in bullion form may I suggest it is a bit more complicated.

Firstly gold in its physical bullion form, like many other assets that appreciate in value over a certain amount, can fall into the capital gains tax bracket. If I sold my gold now I would have tax to pay on the gain as it has appreciated to a significant degree since purchase. However if you buy your gold (or silver) in the form of legal tender, for example gold sovereigns, capital gains tax does not apply.

In terms of benefits this would very much depend on a "decision maker's" ruling. It could well be argued that gold, held as either bullion or legal tender, sovereigns for example, have no other use other than an investment or savings and so fall within the investment or savings umbrella and therefore have to be declared. It would need a test case to resolve this issue but I somehow doubt a gold bullion millionaire would have much mileage in claiming benefits if they had no other savings or investments; I exaggerate to make a point.

In addition if you bought your gold with the intention of reducing your conventional savings for the purposes of claiming benefits this would definitely fall within the scope of "deprivation of capital" and would be counted.

It is worthwhile repeating that any investment in physical gold, whether bullion or coin, is subject to the bid offer spread on purchase which may be around 10%. So your investment would have to increase 10% before you sold to just break even. I was fortunate in buying my gold just before the Brexit vote so benefited from the almost constant rise, with a few dips, since then.

 

[Baxi Boy]

As a significant holder of gold in bullion form may I suggest it is a bit more complicated.

Firstly gold in its physical bullion form, like many other assets that appreciate in value over a certain amount, can fall into the capital gains tax bracket. If I sold my gold now I would have tax to pay on the gain as it has appreciated to a significant degree since purchase. However if you buy your gold (or silver) in the form of legal tender, for example gold sovereigns, capital gains tax does not apply.

In terms of benefits this would very much depend on a "decision maker's" ruling. It could well be argued that gold, held as either bullion or legal tender, sovereigns for example, have no other use other than an investment or savings and so fall within the investment or savings umbrella and therefore have to be declared. It would need a test case to resolve this issue but I somehow doubt a gold bullion millionaire would have much mileage in claiming benefits if they had no other savings or investments; I exaggerate to make a point.

In addition if you bought your gold with the intention of reducing your conventional savings for the purposes of claiming benefits this would definitely fall within the scope of "deprivation of capital" and would be counted.

It is worthwhile repeating that any investment in physical gold, whether bullion or coin, is subject to the bid offer spread on purchase which may be around 10%. So your investment would have to increase 10% before you sold to just break even. I was fortunate in buying my gold just before the Brexit vote so benefited from the almost constant rise, with a few dips, since then.

I was thinking of sovereign and similar gold items rather than bullion,where capital gains would not involved,and only myself would know the buying and selling prices. It’s as good as cash,easy to sell usually at a gain if timed correctly,and doesn’t count as capital for benefit claims or inheritance tax.

 

[Alan22]

This sounds all very complicated, last gold I came by I scrapped it at a jewelers, if it was me I'd be buying platinum or silver, way better short term return.

 

[Muzungu]

I was thinking of sovereign and similar gold items rather than bullion,where capital gains would not involved,and only myself would know the buying and selling prices. It’s as good as cash,easy to sell usually at a gain if timed correctly,and doesn’t count as capital for benefit claims or inheritance tax.

I beg to differ again slightly from some of your points.

Gold sovereigns are not certainly not exempt for inheritance tax as they are part of a person's estate on death. You can of course gift sovereigns subject to the annual gift limits, but that is no different to any other gift of value or cash annually up to the limit of £3000. One can hide them from the authorities before death, but that would require some careful planning and if it was any significant amount you would be open to some dire financial penalties if discovered. This would be no different than hiding any other asset.

As for benefit claims if you were holding a significant amount in sovereigns, that would be very much at the discretion of the authorities and whether they decided it was an investment; as I said, this is a question that is very much open. This is of course if you decided to declare them, but I am talking about the legal position not the position if you are "hiding" your savings. There is no regulation that specifically states they are not counted. To repeat, if you divested yourself of savings into gold with the intention of being eligible for benefits you would absolutely fall within the "deprivation of capital" rules.

As to it being easy to sell at a gain "if timed right", well that is the chance you take as with any other investment asset. It's the "if timed right" bit which is key and it is extremely difficult to make consistent profits, certainly in the short term. My gold has been held long term and is currently making a significant profit, as I say, but that was almost entirely due to good luck.

As to only yourself knowing the buying and selling price of sovereigns or similar (I assume legal tender gold coins) that would be irrelevant as no tax on gold coins would be attracted in any case.

In all the points above I am assuming a person wishes to work within the law, if you wish to work outside the law and regulations that is of course different. If we are only talking about a few thousand here and there it is hardly worth the risk reward ratio in working outside the law. More than a few thousand the reward might be greater but then the risk increases.

 

[michaelwilliams]

Yes. There aren't really any pro's or con's.
Gold has always been the reserve in bad times, that's when it goes up in value. In good times it can drop a bit, but tends to stay fairly static. In all the years that i have bought gold i've never lost on it. It's really not a lot different to buying shares, buy low and sell high.
If you have never done it before though, you do need to be completely on top of world share prices so as to anticipate the best time to buy gold ira investing. The reason for that is the buy price has a massive impact on what you can make over the long term and even more so over the short term.
If there is any secret involved it's to have a good relationship and a lot of trust between you and whatever dealer you are buying or selling to. Over time you will learn when to sell, because until you do sell you won't make anything. For me, i buy and sell regularly making small amounts each time. I think that hanging onto gold for long periods of time only really works for the very wealthy and governments. For small scale investors you have to keep your eye on it all the time, there have been quite a few times over the years that i would have needed to sell if i hadn't kept my eye on things and would have made a loss. Not much of a loss, but a loss is loss.

I would like to buy some gold & silver and I am looking for advice on the most feasible way to go about it. Where and how is the most feasible way of buying gold & silver? For gold, am I better off buying Mint-t? (or similar) Is there an ETR for silver? Thanks in advance.

 

[Muzungu]

I would like to buy some gold & silver and I am looking for advice on the most feasible way to go about it. Where and how is the most feasible way of buying gold & silver? For gold, am I better off buying Mint-t? (or similar) Is there an ETR for silver? Thanks in advance.

It depends upon your reason for buying precious metals and how much you have to "invest", or I would prefer to say, gamble.

I suppose you are aware that gold is at a 20 year high at the moment and silver at a decade high?

As I say, it depends upon how much you have to "invest" (gamble), your personal financial situation, your ultimate aim and your age; your attitude to risk also plays a part. There is no one size fits all in investing in anything. If you already have a substantial financial portfolio, having around 10% of that portfolio in precious metals is often given as a long term (10 years plus) reasonable amount to hold.

Anything is feasible in terms of buying, whether it is feasible in terms of making any money is the question you need to be asking.

 

[michaelwilliams]

Yes. I invested in a kilo bullion just before Brexit. I still have it even though I could have sold a year or so ago at a considerable profit, more through luck than judgement, because of the fall in the pound following Brexit. The best place to buy, that I found, was Bullion by post. You will not really get it anywhere any cheaper as it is based on the spot price. Just checked and I would make about £10k if I sold now.

At the moment it is hovering around a historic high so possibly not the time to buy. A significant component of the Gold price is the pound dollar exchange rate as gold is priced in dollars per ounce. So if the pound falls against the dollar the gold price will, normally, rise by roughly the same, but not always.

It is worthy of note that you will be paying a significant premium on buying, check the daily prices for both buying and selling to see the difference on any of the major Uk retail sellers. The cost of buying decreases slightly the more you buy, as with most things. You will need a rise of about 7%, from memory, before you even break even.

Gold should really be only a small part, say 10%, of your overall investment strategy and you may well keep it for 10 years or more and make nothing. here is got a result in search https://www.moneycontrol.com/news/b...tford-gold-review-best-gold-ira-12340241.html

Anyone who tells you that they can sell you gold at below "spot" price is lying and is out to scam you. You can also go for leveraged online trading in Gold, for example CFD's, this is a mugs game and you will in all likelyhood lose the lot.

Another alternative is investing deirectly in Gold miners' shares or Gold ETF's but we are now getting into a slightly different area than the reall shiny stuff.

I’d like to add a relatively small amount (50k) of gold to my portfolio to include a gold fund and some physical gold. Any suggestions regarding a gold or precious metals fund? Also, any suggestions for reputable companies that sell physical gold with reasonable markup? Thanks.

 

[Muzungu]

I’d like to add a relatively small amount (50k) of gold to my portfolio to include a gold fund and some physical gold. Any suggestions regarding a gold or precious metals fund? Also, any suggestions for reputable companies that sell physical gold with reasonable markup? Thanks.

I didn't look at any gold funds so can't advise unfortunately.

As to buying physical gold I used bullionbypost. It's certainly not a fly by night concern. You'll find they are all just about the same as they work off the spot price which alters by the hour. The mark up will not be much different'; it's impossible to get it "cheap" no matter what people say about buying it abroad, makes no difference.

I "invested" 29k just before Brexit in a 1kg bar. It is now, if I sold today, around 50k before capital gains which would be around 5k or so. Might be a bit off there. I struck lucky though, not really through any judgement on my part. May be worth buying in 500 gram or less bars if you are thinking you may want liquidate part of it; you can't really hacksaw a 1kg bar in half. Well you can but you would have trouble getting anyone to buy it. Then you can always buying gold in legal tender but the mark up would be greater although it would be exempt from capital gains.

Just be aware the price of gold currently is at, or around, an all time high so bear that in mind. Physical gold is certainly not a guaranteed winner. It is quite possible that 5-10 years from now it could be at the same price or lower, maybe higher, who knows. It should really be regarded as a safe haven investment of less than 10% of one's overall assets. When the collapse of the financial system happens with the consequent civil disorder, rioting on the streets, roving gangs of Mad Max type gangs etc. you will have a store of wealth to barter for food, fuel, ammunition and whatever other luxuries take your fancy.

 

[quasar9]

No investment is safe. Gold too, which goes up in times of war and economic turmoil and falls where there is peace and prosperity. On that basis there is no guesses on the merits of investing in gold today !

 

[michaelwilliams]

I didn't look at any gold funds so can't advise unfortunately.

As to buying physical gold I used bullionbypost. It's certainly not a fly by night concern. You'll find they are all just about the same as they work off the spot price which alters by the hour. The mark up will not be much different'; it's impossible to get it "cheap" no matter what people say about buying it abroad, makes no difference.

I "invested" 29k just before Brexit in a 1kg bar. It is now, if I sold today, around 50k before capital gains which would be around 5k or so. Might be a bit off there. I struck lucky though, not really through any judgement on my part. May be worth buying in 500 gram or less bars if you are thinking you may want liquidate part of it; you can't really hacksaw a 1kg bar in half. Well you can but you would have trouble getting anyone to buy it. Then you can always buying gold in legal tender but the mark up would be greater although it would be exempt from capital gains.

Just be aware the price of gold currently is at, or around, an all time high so bear that in mind. Physical gold is certainly not a guaranteed winner of Our Fiscal Security. It is quite possible that 5-10 years from now it could be at the same price or lower, maybe higher, who knows. It should really be regarded as a safe haven investment of less than 10% of one's overall assets. When the collapse of the financial system happens with the consequent civil disorder, rioting on the streets, roving gangs of Mad Max type gangs etc. you will have a store of wealth to barter for food, fuel, ammunition and whatever other luxuries take your fancy.

thank you so much for your suggestion